Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York State Department
DATE: June 26, 1990
of Social Services Docket No. 90-122
Decision No. 1170
DECISION
The New York Department of Social Services (State) appealed a
determination of the Health Care Financing Administration (HCFA)
disallowing $676,822 in federal financial participation (FFP) claimed by
the State under Title XIX of the Social Security Act for the quarter
ended December 31, 1989. The State's claim was for costs associated
with its Welfare Management System in New York City (WMS/NYC). HCFA
disallowed the costs claimed at the 75 percent rate for operation of
WMS/NYC. The amount disallowed represents the difference between FFP at
the 75 percent enhanced funding rate (available for operational costs of
an approved mechanized claims processing and information retrieval
system), and FFP at 50 percent (the rate generally available for
administrative costs of the Medicaid program).
In its Notice of Appeal, the State indicated that the issues in this
appeal were similar to the issues decided in New York Dept. of Social
Services, DAB No. 1145 (1990), and requested that the Board issue a
summary decision based on that decision. HCFA had no objection.
In DAB No. 1145, the Board sustained HCFA's disallowance of operational
costs of the WMS/NYC. The Board found that the State improperly claimed
75 percent FFP for the operation of its WMS/NYC because HCFA had not yet
reviewed the system and approved it as operational. The Board
determined:
o The WMS/NYC must be approved by HCFA in order to receive
enhanced funding for operational costs of the system.
o HCFA has the authority to require a review of WMS/NYC in
accordance with the regulations and policy for mechanized
claims processing and information retrieval systems. o HCFA
informed the State that enhanced funding was subject to its review
and approval.
o Only 50 percent funding is available for Medicaid
administrative costs unless the State shows that the special
requirements for a higher rate are met.
o HCFA's authority is not limited to initial approval of the MMIS
(Medicaid Management Information System) or an annual System
Performance Review of the MMIS.
o HCFA's actions in reviewing the WMS/NYC and Upstate WMS were
consistent with HCFA policy and reasonable.
Therefore, we sustain the disallowance of $676,822 based on DAB No.
1145, which we incorporate by reference.
Cecilia Sparks Ford
Norval D. (John) Settle
Judith A. Ballard Presiding Board